Warne has been checking the possibility of taking German citizenship -- his mother Brigitte was born in Germany -- so he can become a home player and allow his county side Hampshire to sign another overseas player.
But not if it means he has to give up his Australian passport.
"It's not going to happen," Warne's manager James Erskine said. "Under no circumstances would Shane Warne renounce his Australian citizenship or have another nationality in preference to being Australian.
"He's an iconic Australian sportsman. He's very proud to be Australian," Erskine said.
"If it was possible for him to have a German passport as well as an Australian passport, that would be fine.
"He's not necessarily said 'I'm definitely going to do it', but I'm sure he would consider it.
"It just depends on whether or not he wants to go on playing county cricket anyway."
The 37-year-old leg-spinning great first played for Hampshire seven years ago and has been with the English county since 2004 in his current spell.
He is contracted to the county until the end of next season, having retired from Test cricket in January with a record of 708 wickets in 145 matches.
It was an idea of Hampshire county chairman Rod Bransgrove for Warne to take out German citizenship and Warne is said to be dismayed at how the story has escalated.
Warne owns a house on the south coast of England, which he shares during the cricket season with his former wife Simone and their three children, and they live in Melbourne during the Australian summer.
"Everything's going well," Erskine said. "Whether the family will move back over there next year is for them to decide because of the children's schooling."
"He always likes playing cricket, but I think with the kids growing up he will come back to Melbourne, live in Melbourne, and I would think that probably next year will be the last year with Hampshire."
The weekend report caused a stir in Australia with Prime Minister John Howard saying he would be "amazed" if Warne opted to become a German citizen in order to play cricket in England.
"I would be amazed if Shane ended up doing that -- amazed. So would a lot of Australians," Howard told reporters.